Accurate Sales Forecasting Depends on Analytics

Companies using sales analytics/forecasting tools show consistently higher levels of performance around quota attainment, deal size, revenue per sales rep and reducing their sales cycle, according to a new research study. “Sales Forecasting: Analytics to the Rescue!” was published by Aberdeen Group, and examined 422 organizations' sales effectiveness.

Enterprise sales organizations are under increasing pressure from internal and external stakeholders to provide more accurate sales forecasts of revenue in order to better predict and improve the long-term health of their company.

To maintain a competitive position, companies are turning to sales analytics solutions that provide an enterprisewide data flow into the forecasting process, thus creating a more refined snapshot of future revenue and empowering more efficient, margin-driven sales activity as well as more pure selling time by the sales team itself.

"Companies using sales analytics/forecasting tools outperform others by 1.3 times in achieving their overall annual sales quota, and 1.5 times in their win/loss ratio," says the report’s author Peter Ostrow, research director, sales effectiveness, Aberdeen Group. Through deployment of sales analytics tools, Aberdeen finds that companies achieve some significant benefits, such as 12.6 percent average annual increase in quota attainment, compared to a 2.3% decrease for other companies. Aberdeen also noted a 9.1% average year-over-year increase in annual gross revenue per sales rep, compared to a 1.5% decrease for others.

Recommendations from Aberdeen to achieve top performance include collecting, analyzing and disseminating accurate forecast to all stakeholders frequently, and also automating sales forecasting elements with ad hoc queries, customization and customer relationship management/sales force automation integration.